HR and Employee Screening Issues Affecting your Business

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Information contained in this page is of a general informational nature and nothing herein, or on this website, should be construed as legal advice. For advice on questions of law, please consult a qualified attorney for additional guidance.

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Month: February 2017

(Disclaimer: The information contained herein is not legal advice, and should not be construed as such. You should discuss the use of consumer reports with your organization’s legal counsel to ensure regulatory compliance.)

Historically, United States employers have commonly utilized credit history as a measure of financial responsibility and overall trustworthiness for employment applicants. However, in recent years, numerous states and municipalities have enacted legislation restricting the use of credit history in the applicant screening process to a small number of exceptions; primarily to those applicants who will have fiduciary roles if hired.

When utilizing credit reports in the hiring process, there are two primary factors employers and hiring managers should take into consideration:

The laws and regulations governing the use of credit reports for employment purposes.

a) Employers and hiring managers should familiarize themselves with state/municipal laws that may limit the use of credit history in employment decisions. Some of the states/metropolitan areas with laws enacted to further regulate the use of credit history in the hiring process include: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maryland, Nevada, Oregon, Vermont, Washington, Chicago, New York City and Philadelphia. The primary objective of most laws enacted by these states and jurisdictions is to restrict the use of credit reports to ensure they are only utilized when the position includes fiduciary responsibilities or positions with high compensation and/or financial decision making authority.

The relevance of the report in the hiring process.

The Society for Human Resource Management (SHRM) encourages employers to consider the nature of the position prior to using credit history in the hiring screening process. SHRM notes the following:

If the responsibilities of the job call for the employee to handle money, assets, clients’ personal information, or proprietary company data, the information provided in the credit report may be very useful … If the position doesn’t require the applicant to have access to financial or proprietary company data, a credit report may not be needed.

Ultimately, it is the responsibility of hiring managers to ensure they remain in compliance with both the FCRA and any other applicable state or local laws and regulations.

Joining the list of states with changing/recently-changed pay equity laws is Maryland, with a law that reaches far beyond pay.

In 2016, Maryland amended its Equal Pay for Equal Work Act on the basis of sex and/or gender identity. The amendment covers employees working for the same employer, in the same county, who perform similar work.

The law, which covers more than pay disparities, also prohibits employers from “providing less favorable employment opportunities.” These less than favorable employment opportunities include assigning employees to less favorable career tracks, failing to provide information about promotions/advancements and limiting/depriving employees that would otherwise be available to the employee if not for their identification (sex or gender identity).

And continuing the trend of laws in other states Salary in the Hiring Process, the law also clearly outlines that employers are not allowed to prohibit employees from inquiring about, discussing or disclosing their personal wage information, or information surrounding the wages of others.

In the event that this law is violated, the Commissioner may try to resolve the issue informally with mediation, or request the Attorney General to take action on behalf of the candidate or employee. Employees may also take action against employers, but must file any and all actions within an amount of time designated by the State of Maryland Department of Labor, Licensing and Regulation (DLLR).

This law, which took effect October 1, 2016, requires several changes from employers.

Employers are solely responsible for ensuring they are in compliance with all federal, state and local laws such as those mentioned above. For more information on these laws, and the effect on your organization’s policies and practices, please consult your legal counsel. A-Check Global provides legal and legislative content for general information purposes only.

A-Check Global strives to provide resources regarding current and pending local, statewide and federal laws which may impact employment screening. For more information on how current or pending legislation may affect your employment screening programs, please contact A-Check Global through our contact page, or by phone at 877-345-2021.

A-Check Global recently shared Salary History Restrictions information about the push for equal pay in numerous states throughout the country. Of the states mentioned, Massachusetts has proven itself to be the state with the most stringent legislation thus far.

Massachusetts is the first state to outwardly ban employers from making salary inquiries in the hiring process. The new legislation, slated to take effect in 2018, prohibits employers from asking about salary history prior to extending an offer; making it arguably one of the most groundbreaking equal pay laws in the United States.

Additionally, according to a press release released on the Official Website of the Governor of Massachusetts:

The new law will prevent pay discrimination for comparable work based on gender. The bill allows employees to freely discuss their salaries with coworkers, prohibits employers from requiring applicants to provide their salary history before receiving a formal job offer and authorizes the Attorney General to issue regulations interpreting and applying the expanded law.

Like laws, acts and amendments in other states, the Massachusetts law also prohibits pay differentials for comparable work and limits acceptable factors employers may use to explain differences in compensation. However, unlike California and New York laws, Massachusetts will only permit employers to cite geographic location as justification of wage differentials.

The new law, which seems to have been on the horizon since 1998, is being considered a major win for Massachusetts politicians across partisan lines. For employers, however, it is a slightly different story.

The new law will require employers to re-evaluate and adjust numerous aspects of their hiring and employment practices – from removing application questions to ensuring they are not passively suggesting that employees refrain from discussing salaries – employers have work to do.

It is important for employers to understand how these changes affect their business. It is equally important for them to work to implement any/all changes prior to the 2018 effective date.

Employers are solely responsible for ensuring they are in compliance with all federal, state and local laws such as those mentioned above. For more information on these laws, and the effect on your organization’s policies and practices, please consult your legal counsel. A-Check Global provides legal and legislative content for general information purposes only.

A-Check Global strives to provide resources regarding current and pending local, statewide and federal laws which may impact employment screening. For more information on how current or pending legislation may affect your employment screening programs, please contact A-Check Global through our contact page, or by phone at 877-345-2021.

An employer may not pay different rates based on gender. Men and women must receive the same rate of pay if they work: in the same establishment, on jobs that need equal effort, skill and responsibility, and under similar conditions.

The law does permit different rates of pay based on factors other than gender, such as: length of service, quality of work and quantity of work.

The Commissioner of Labor can enforce claims of workers based on violations of the Equal Pay Law similar to other wage payment laws.

These statutory provisions, which share multiple similarities with California’s recently-amended Fair Pay Act California Equity Blog, make it seemingly easy for employees to make claims of pay inequity. Additionally, these provisions create more room for comparison between employees working in the same geographic region – which, unlike California’s law, is restricted to the same county.

Although these changes are significant, they are not comprehensive and/or inclusive of additional legislation passed in jurisdictions such as New York City, where the morale for equal pay is at an all-time high.

Employers are solely responsible for ensuring they are in compliance with all federal, state and local laws such as those mentioned above. For more information on these laws, and the effect on your organization’s policies and practices, please consult your legal counsel. A-Check Global provides legal and legislative content for general information purposes only.

A-Check Global strives to provide resources regarding current and pending local, statewide and federal laws which may impact employment screening. For more information on how current or pending legislation may affect your employment screening programs, please contact A-Check Global through our contact page, or by phone at 877-345-2021.